(a) In cases where any person or entity is due a refund of state income taxes, and that same person owes a debt or obligation for which the Commissioner of Administrative Services is seeking reimbursement, the Commissioner of Revenue Services, upon notification by the Commissioner of Administrative Services, shall withhold the payment of said refund to such person or entity to the extent of such debt or obligation, provided the Commissioner of Revenue Services shall notify such debtor that he or she has the right to a hearing before an officer designated by the Commissioner of Administrative Services if he or she contests the validity or amount of the Commissioner of Administrative Services' claim, except that where the debt or obligation is a debt resulting from failure to pay an order for child support, the administrative review process will be held in accordance with subsection (e) of section 52-362e. If the debtor fails to apply in writing to the Commissioner of Administrative Services for a hearing within sixty days of the issuance of notice of withholding, the Commissioner of Revenue Services shall remit the amount of the withheld refund to the Commissioner of Administrative Services. If the debtor elects an administrative hearing within this time, the Commissioner of Revenue Services shall remit the amount of the withheld refund in accordance with any decisions of the hearing officer or the court upon an appeal of the hearing officer's decision.

(b) (1) In cases where any person or entity is due a refund of state income taxes, and that same person is in default of a student loan made or guaranteed by the Connecticut Student Loan Foundation or the Connecticut Higher Education Supplemental Loan Authority, the Connecticut Student Loan Foundation or the Connecticut Higher Education Supplemental Loan Authority, as appropriate, shall notify the Commissioner of Administrative Services of such default. The Commissioner of Revenue Services, upon notification by the Commissioner of Administrative Services, shall withhold the payment of said refund to such person to the extent of such default, provided the Commissioner of Revenue Services shall notify such person in default that he or she has the right to a hearing before an officer designated by the Commissioner of Administrative Services if he or she contests the validity or amount of the Commissioner of Administrative Services' claim. If the person in default fails to apply in writing to the Commissioner of Administrative Services for a hearing within sixty days of the issuance of notice of withholding, the Commissioner of Revenue Services shall remit the amount of the withheld refund to the Commissioner of Administrative Services, who in turn shall remit the amount of such withheld refund to the Connecticut Student Loan Foundation or the Connecticut Higher Education Supplemental Loan Authority, as appropriate. If the person in default elects an administrative hearing within this time, the Commissioner of Revenue Services shall remit the amount of the withheld refund in accordance with any decisions of the hearing officer or the court upon an appeal of the hearing officer's decision. If a person in default also owes a debt or obligation described in subsection (a) of this section, the refund shall be applied against such debt or obligation before being credited against the amount of the default.

(2) The Commissioner of Revenue Services, the Commissioner of Administrative Services, the president of the Connecticut Student Loan Foundation or the executive director of the Connecticut Higher Education Supplemental Loan Authority, as appropriate, on behalf of such corporation, shall enter into an agreement for the crediting of income tax refunds against the amount a taxpayer is in default of a loan pursuant to subdivision (1) of this subsection. The agreement shall include procedures for the Connecticut Student Loan Foundation or the Connecticut Higher Education Supplemental Loan Authority, as appropriate, to (A) notify the Commissioner of Administrative Services of a default, and the amount of the default, and (B) reimburse the Department of Administrative Services and the Department of Revenue Services for any costs incurred by the departments in carrying out the provisions of this subsection.

(June Sp. Sess. P.A. 91-3, S. 93, 168; P.A. 92-253, S. 7; P.A. 01-102, S. 6, 7; P.A. 07-108, S. 4; 07-247, S. 65.)

History: June Sp. Sess. P.A. 91-3, S. 93, effective August 22, 1991, and applicable to taxable years of taxpayers commencing on or after January 1, 1991; P.A. 92-253 added phrase “except that where the debt or obligation is a debt resulting from failure to pay an order for child support, the administrative review process will be held in accordance with subsection (c) of section 52-362e”; P.A. 01-102 designated existing provisions as Subsec. (a), made technical changes in Subsec. (a) and added Subsec. (b) re person or entity in default of a student loan; P.A. 07-108 amended Subsec. (b) to add provisions re Connecticut Higher Education Supplemental Loan Authority, effective July 1, 2007; P.A. 07-247 amended Subsec. (a) by replacing reference to Sec. 52-362e(c) with reference to Sec. 52-362e(e).